Asian currencies mostly higher, rupiah steady
Asian currencies mostly higher, rupiah steady
SINGAPORE (Dow Jones): The Japanese yen's vigor buoyed most Asian currencies late Thursday, dealers said.
The yen provided some relief for the won, the New Taiwan dollar, and to a lesser extent, the Singapore dollar, although the impact was relatively modest, given that the Japanese currency was wedged within familiar ranges, currency watchers said.
The South Korean won, the New Taiwan dollar, the Singapore dollar and the Philippine peso were firmer. The Thai baht was slightly weaker.
The Indonesian rupiah held steady, despite the increased likelihood of renewed speculation on the currency, following a decision by a handful of major foreign banks in Singapore to start trading rupiah non-deliverable forwards from Monday, dealers said.
The rupiah was unchanged from Wednesday around 9,595 to the dollar.
The new market, beyond Bank Indonesia's jurisdiction because settlement would be in dollars, might allow arbitrageurs to capitalize on discrepancies in NDF and onshore rates, putting the rupiah in a dangerous position given the smoldering social and political problems in Indonesia.
Overall, trading was cautious as market participants sat tight ahead of potentially market-moving announcements by monetary authorities in Singapore and Thailand, and as they re-assessed the prospects of another aggressive interest rate cut in the U.S., dealers said.
Market participants continued to digest Federal Reserve Chairman Alan Greenspan's cautiously optimistic views on the U.S. economy, in his testimony to the Senate Banking Committee Tuesday, dealers said.
The South Korean won was the biggest gainer in Asian foreign exchange markets, thanks to the yen's advance, dollar-selling by local exporters and foreign equity fund inflows, dealers said.
Extending its recent decline, the dollar closed at 1,247.0 won, down from 1,252.3 won Wednesday.
There are also concerns that the South Korean central bank may intervene to curb the won's appreciation, to maintain the country's export competitiveness amid slowing external demand, he said.
The New Taiwan dollar benefited from the yen's gains and a 3.7 percent surge on the local bourse, dealers said.
The U.S. dollar closed at NT$32.344, down from Wednesday's close of NT$32.387.
After trading in a tight range, the Singapore dollar strengthened slightly to S$1.7447 against its U.S. counterpart, from S$1.7450 late Wednesday.
Market participants were hesitant to take aggressive positions ahead of a policy statement by the Monetary Authority of Singapore next week, dealers said.
Mounting pressure on Japanese Prime Minister Yoshiro Mori to resign and repatriation flows shored up the yen, which was quoted at Y116.16 to the dollar around 1015 GMT (5:15 a.m, EST), compared with Y116.45 late Wednesday in New York. The dollar was at Y116.60 late Wednesday in Tokyo.
But the yen's strength didn't rub off on the Thai baht, as offshore participants refrained from taking new positions ahead of the Thai central bank's meeting with commercial bank treasurers Friday, dealers said.
Bank of Thailand will clarify its new disclosure requirements on foreign exchange transactions, effective March 1, at the meeting.
Bank of Thailand's move to standardize, and make more stringent, reporting formats of foreign exchange dealings by onshore banks had sparked fears - among some - that this could be a precursor to more rigid exchange controls, dealers said.
The dollar was quoted at 42.425 baht, up from 42.370 baht late Wednesday.
The Philippine peso closed higher as exporters unloaded dollars and as fears of a credit rating downgrade by Fitch subsided following the agency's comments that such a move is less likely following the leadership change, dealers said.
"The whole dynamics have changed since the political situation stabilized," said Shridharan at Standard Chartered Bank.
The dollar closed at 47.490 peso on the Philippine Dealing System, down from Wednesday's close of 47.955 peso.